Garry Rayno's State House Dome: Medicaid issues form triangle of concerns

By GARRY RAYNOState House Bureau

The Medicaid Dilemma: Senate budget writers are facing a complicated triangle of issues. The three sides: expanding Medicaid under the Patient Protection and Affordable Care Act; managed care; and the Medicaid Enhancement Tax.

If New Hampshire is going to expand Medicaid - the federal-state health-care program for the poor - the state needs to have a managed care program to try to control costs, including those stemming from expensive emergency health-care services. The state's hospitals so far have refused to sign up for the managed care program and are not likely to do so until the lawsuit they filed against the state over Medicaid reimbursement rates is settled.

The state's largest hospitals claim the rates were reduced illegally and are so low that Medicaid cannot be sustained.

The House and Gov. Maggie Hassan want to expand Medicaid. They tried to entice the hospitals to join the managed care program by reinstating some money the Republican-controlled Legislature cut two years ago from the Disproportionate Share Hospitals program. That program distributed money to hospitals to offset the cost of uncompensated care they provide.

That program is tied to the Medicaid Enhancement Tax, which was established in 1991 and essentially taxed hospitals for patient services, used the money to match federal funds and then sent the tax money back to hospitals.

The program has been significantly reduced since those early days and several budgets ago began to actually be tied to the uncompensated care hospitals provided, so not every hospital got back all of its tax money.

And then two years ago, lawmakers eliminated the program for the largest hospitals, causing them to recalculate what they owed the state in taxes. The recalculation resulted in a drop of $25 million from what state officials believed they would receive.

This fiscal year, the state is about $35 million short.

Hassan and the House assumed the hospitals would pay what the state expects - about $50 million to $60 million more than the hospitals appear ready to pay.

If the hospitals pay the higher amount, Hassan will use most of that money to reinstate the uncompensated care program for the larger hospitals, though not at 100 percent.

Both Hassan and the House believe the added incentive may cause the hospitals to join the managed care program. If the program does go forward, Hassan and the House believe that would significantly boost revenues from the insurance premium tax, which also helps to balance the budget.

The triangle may really be one big circle, but until all the pieces fall into place - Medicaid expansion, managed care and uncompensated care coupled with the tax - the budget will be very difficult to balance.

Until the Medicaid issues are resolved or the House passes a casino gambling bill to raise revenue, the House and Senate budgets will be almost impossible to reconcile.

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Pay Up: The Attorney General's Office wants to join a national effort to force online travel companies to pay the rooms and meals tax on retail lodging rates.

The attorney general wants state budget writers to allow his office to hire outside counsel - the National Online Travel Litigation Group (NOTLG) - to pursue the state's claim for additional tax revenues from the online companies.

According to information Attorney General Michael Delaney provided the Joint Legislative Fiscal Committee, which will act on his request Friday, the online travel companies pay the rooms and meals tax on the wholesale rate they receive from hotels, then resell the rooms to consumers at a 30 percent or higher retail rate.

"The OTCs do not pay tax on the approximately 30 percent mark-up rate charged to the consumer," Delaney writes. "As a result, the taxing entity receives significantly less tax than is due."

To date, about 50 lawsuits have been filed against the online travel companies by cities and towns, counties and states over the issue. Eighteen cases have been resolved in court, 12 in favor of the government, and 12 other cases have reached negotiated settlements.

Delaney said no law firms in the state have the expertise of the NOTLG, which consists of three Georgia law firms that have filed cases in Mississippi, Montana and Kentucky.

The law firms would keep 25 percent of any money recovered for New Hampshire, which Delaney calls a very competitive rate, and would bear the up-front investigative and legal costs.

Delaney said his department does not have the resources necessary to pursue the case, which would require significant up-front payments.

The potential litigation has the support of the Department of Revenue Administration, the Department of Resources and Economic Development and the New Hampshire Lodging and Restaurant Association.

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Shooting the Messenger: Rep. Patricia Higgins, a Hanover Democrat who serves on the Public Works and Highways Committee, was offered a chance to attend a National Rifle Association handgun training course at a free or reduced cost.

The basic handgun class usually costs $170 and Higgins was offered a "guest slot" to attend for free.

So she asked the Legislative Ethics Committee if an honorarium exception to the statutorily defined gift limit would apply. Lawmakers are forbidden to accept gifts worth $25 or more, but an exception is allowed for honorariums or reimbursement for expenses incurred for such things as speeches or appearances, written articles or participation in a discussion group or other such activities related to being a lawmaker.

In the opinion of Martin Gross, Ethics Committee chairman and Concord attorney, the guest slot would represent more than a $25 gift and "does not fit within the honorarium exception."

And he said the idea of expense reimbursement also would not apply to the gun-training course.

"We advise Rep. Higgins that acceptance of a 'guest slot' at the handgun course valued at $170 would be a prohibited gift," Gross writes. "In response to another of her questions, we also advise her that she might accept a discount of up to $24.99 from the course tuition, without violating the statute."

At that price, not many lawmakers will be attending the handgun training course, which would cost more than their annual salary for serving in the Legislature.

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Gambling and Republicans: While state GOP Chairman Jennifer Horn has repeatedly blasted Hassan over her support for expanded gambling and more particularly for including $80 million in her budget from casino licensing fees, other Republicans take a different bent.

There is plenty of Republican support for expanded gambling in the Senate, including Salem's Chuck Morse, prime sponsor of Senate Bill 152, which has a public hearing Tuesday before the joint Finance and Ways and Means committee, and among a goodly number of House Republicans, many of whom backed a more expansive gambling proposal last year that failed.

Casino gambling never became much of a hot issue during the gubernatorial campaign because both Hassan and Republican Ovide Lamontagne supported it, as did Republican candidate Kevin Smith, who said he would push for two casinos, one in Salem, presumably at Rockingham Park.

In a fundraising email seeking donations for the state party, Smith wrote Thursday: "Governor Hassan believes that the way to prosperity for New Hampshire's economic future is: a casino. Whether or not one agrees with the merits of having a casino in state, there is broad consensus that Governor Hassan's plan to balance New Hampshire's budget and build our economic future around such is neither innovative nor creative - it is pathetic."

The change in tone did not escape one Republican consultant, Tyler Deaton, who wrote in a tweet: "How pro-casino is (Kevin Smith)? He held a campaign event at The Rock & promised his support to the people of Salem."

Smith responded it shows his consistency of opposing new revenue because it means bigger government.

Deaton is with B-Fresh Consulting, whose clients include Cannery Casino Resorts, long a player in seeking to bring casino gambling to New Hampshire.

In another tweet, Deaton wrote: "You praised the job creation and economic activity expanded gaming would bring to the state. Now you bash it." Smith responded by saying "being pro-casino and anti-big government are not mutually exclusive."

Some observers have openly wondered how long Morse and a few other Republicans would wait while party officials blasted their gambling plan.

We have our answer.

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A Twitter Victory: New Hampshire House Communications Director Mario Piscatella has tried for months to gain control of the House of Representatives Twitter account, which is @NHHouseofReps.

Twitter refused to allow Piscatella to access the account because he did not have the password.

The account was created by former House Information Officer and longtime New Hampshire Union Leader reporter Cissy Taylor, who left the post in 2010. She died just a year ago this month, and evidently, the password went with her.

Piscatella tried to come up with a new user name that looks like the NH House, but those that would work were already taken.

So after much negotiating with Twitter personnel during the past month, Piscatella was finally allowed to use the account last week.

Not much has been posted yet, but he promises it will be an active account.